Fisker Hammered in Congressional Loan Hearing


  • 2012 Fisker Karma Picture

    2012 Fisker Karma Picture

    Fisker Automotive built approximately 2,000 Fisker Karmas before times got rough. | April 25, 2013

2 Photos

Just the Facts:
  • Beleaguered Fisker Automotive drew the wrath of top congressional Republicans in a hearing on Wednesday, with one of them saying that "taxpayers have effectively subsidized luxury novelty vehicles for the likes of Justin Bieber, Leonardo DiCaprio and Al Gore."
  • The hearing, entitled "Green Energy Oversight: Examining the Department of Energy's Bad Bet on Fisker Automotive," looked into nearly $200 million in taxpayer-funded loans to the automaker.
  • Fisker Automotive has teetered on the brink of bankruptcy for several weeks.

WASHINGTON — Beleaguered Fisker Automotive drew the wrath of top congressional Republicans in a hearing on Wednesday, with one of them saying that "taxpayers have effectively subsidized luxury novelty vehicles for the likes of Justin Bieber, Leonardo DiCaprio and Al Gore."

The hearing, entitled "Green Energy Oversight: Examining the Department of Energy's Bad Bet on Fisker Automotive," looked into nearly $200 million in taxpayer-funded loans to the automaker.

Fisker Automotive has teetered on the brink of bankruptcy for several weeks.

Rep. Jim Jordan, R-Ohio, kicked off the hearing with the Justin Bieber remark. He criticized Fisker for ignoring "market signals and consumer demand."

"Its North Star was the political winds of Washington," Jordan said.

Fisker was approved for $529 million government loans in 2010 and received $192 million before getting cut off.

Fisker executives who appeared at the hearing insisted that they did not use political connections to secure the loans.

"Some have alleged that the company only received the loans due to political connections," said Henrik Fisker, the Danish auto designer who founded Fisker, but left the company in March. "Let me be clear: I am not aware and do not believe that any improper political influence was used in connection with the company's loan application or subsequent negotiations with the Department of Energy. As stated earlier, we were approached and encouraged to apply for a loan by the Department."

Republicans on the House Oversight Committee said their concerns were not with Fisker, but with the U.S. Department of Energy, which approved the loans. Fisker received the loans through a program Congress set up in 2007 for green-energy projects and high-tech vehicles. Under the program, loans were provided to Fisker, Ford, Nissan and Tesla.

Fisker used the money to build the $100,000 Fisker Karma, a plug-in hybrid luxury car that was assembled in Finland. In his testimony, Henrik Fisker said approximately 2,000 Karmas were built. He said production was halted due to "several difficult events," including recalls, delays in regulatory approvals and Hurricane Sandy, which destroyed 330 Karmas in an East Coast port.

Rep. Elijah Cummings, D-Maryland, requested that the hearing be postponed because he feared the timing could affect Fisker's chance to avoid bankruptcy. But it went forward anyway.

House Oversight Chairman Darrell Issa, R-California, told Henrik Fisker he will go down in history with other auto pioneers known for their failures.

"You know that your place in history as a body designer is secure," Issa said. "Yes, you are going to be with Preston Tucker for building an innovative car that didn't last. You'll be with Malcolm Bricklin. You'll be with John DeLorean. Innovative cars have a history of failing."

Fisker Automotive COO Bernhard Koehler said in his written testimony: "While I do not know exactly what the future holds for Fisker Automotive, including whether the company will find new investors or whether the company may be obliged to seek bankruptcy protection to facilitate its continued efforts to preserve value for all stakeholders, I intend to keep working toward achieving the mission and vision of the company. "

Edmunds says: The hearing marked another gloomy chapter for Fisker Automotive, as taxpayers scratch their heads over whether the startup should have ever received federal funds.

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